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Thai Textiles Industry

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The textile industry is divided into five sub-sectors, namely fibers; spinning; fabrics; bleaching, dyeing, printing & finishing; and clothing. These industries are linked and form as a complete process of clothing production, beginning with the spinning of fibers into yarn, and weaving or knitting of the yarn into fabrics, then bleaching, dyeing, printing and finishing of the fabrics to the required color and design for use as raw materials of clothing.

The textile industry remains vital to the country's economy and employment although it has been hit by the diminishing purchasing power, both locally and overseas, and keener price competition. In 2000, the exports of textile products totaled Bt. 199.768 billion or US$ 4.974 billion, the second top earner after computers & peripherals, leading Thailand to enjoy a trade surplus of Bt. 127.752 billion or US$ 3.181 billion. Clothing, in particular, contributed to as high as Bt. 129.467 billion in trade surplus. Meanwhile, cotton fibers and knitted fabrics suffered a trade deficit of Bt. 18.833 billion and Bt. 6.383 billion respectively. The employment of about 1 million people was generated by the whole textile industry.

Exports and trade balance of textile products during 1998-2000

(Bt. million)

Item 1998 1999 2000


Trade balance Export Trade balance Export Trade balance

Cotton fiber 184.9 -18,371.6 119.9 -14,852.2 80.3 -18,832.5

Synthetic fiber 7,025.7 3,821.2 7,506.1 4,401.1 9,892.4 6,100.4

Yarn 17,741.4 8,599.1 16,706.0 6,901.7 19,709.7 5,294.8

Woven fabrics 33,999.7 15,953.6 30,459.6 13,558.4 33,322.1 12,105.3

Knitted fabrics 1,819.9 -5,606.7 2,124.0 -5,317.9 2,673.9 -6,383.3

Clothing 130,129.8 127,329.6 117,860.6 114,749.5 134,089.7 129,467.2

Total 190,901.4 131,725.2 174,776.2 119,440.6 199,768.1 127,751.9

Source: Department of Business Economics, compiled by IFCT's Research Department


The fiber, yarn, fabric and bleaching, dyeing, printing & finishing industries are capital intensive, using medium to high technology, while clothing is labor intensive. In overall, the machinery and technology are mostly obsolete, with over 15-20 years of utilization and there is little research and development of new products, resulting in low production efficiency, products mostly of medium to low quality, with plain properties and characteristics and a lack of diversity. The products are generally made in mass production for sales at low prices.

The overall Thai textile production scaled up during 1999-2000 compared with the economic crisis period in 1997-1998. However, only the cotton fiber production still declined on account of farmers' shift to other crops instead of cotton which is vulnerable to pest disease and involves high cultivation costs but with small profits. Such textile production growth was chiefly motivated by the expansion to meet export demand. The average capacity utilization was 60%-80%.

As regards production costs, raw materials and energy form the major parts. In 2000, the oil price hike of about 44% from the preceding year triggered a rise in energy costs and prices of raw materials of synthetic fiber. As a consequence, the production costs of synthetic fiber, yarn, fabrics, and clothing surged from a year earlier. Moreover, the textile production has to partially depend on imported raw materials, notably cotton fiber, PTA, caprolactam, EG, and acrylonitrile. Due to the sharp weakening of the baht in 2000, the import costs of these materials were higher, another factor contributing to the rising production costs of textile products.

Market Situation

Local market

The local consumption of textile products grew during 1999-2000 compared with the 1997-1998 crisis period. Despite such growth, manufacturers were not able to greatly raise the selling prices due to a large amount of oversupply. Furthermore, there was still a considerable amount of imports, especially for yarn and fabrics, because the imported products were cheaper and more diverse, thus giving rise to intense price competition. The most badly hurt were small and medium manufacturers which have poor production efficiency and occupy a large local market share. Some of them suffered a heavy loss and had to close down eventually. Meanwhile, medium and large manufacturers with constant production efficiency improvement and an ability to produce quality products and penetrate the overseas market were not severely affected.

Overseas market

During 1999-2000, the consumption growth in the export market surpassed that in the domestic market due to stronger overseas purchasing power, leading the manufacturers to emphasize on the export market. In addition, the sharp decline of the baht helped to boost the international competitiveness and export value of Thai textile products. In 2000, the exports enjoyed a 7.7% rise from the foregoing year, amounting to Bt. 199.768 billion or US$ 4.974 billion. The top export item was clothing, constituting 67.1% of the total export value, followed by fabrics and yarn. The US, the EU, and Japan remained Thailand's big buyers. However, in the first half of 2001, the exports dropped 4.0% from the same period of last year to Bt. 115.034 billion, or US$ 2.596 billion, motivated by weakened worldwide purchasing power and slowing expenditure on textile products amid global economic slump. Exports of fibers, fabrics and clothing fell 9.8%, 3.4% and 5.5% to US$ 118.9 million, US$ 436.5 million and US$ 1.481 billion respectively, with the exception of yarn which continued to expand, by 1.2% from the corresponding period last year.

Thailand's textile exports during 2000-2001(Jan-Jun)

(Volume: tons; value: US$ million)

Product 2000 2000(Jan-Jun) 2001(Jan-Jun) Growth rate(%)

Volume Value Volume Value Volume Value Volume Value

Fibers 269,126.4 260.6 134,158.8 131.7 130,170.9 118.8 -3.0 -9.8

-Cotton 3,200.0 2.0 433.9 0.2 340.0 0.2 -21.6 0.0



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